WorksheetsConsumer Economics - Managing Types of Credit Review
Total questions: 39
Worksheet time: 20mins
Name
Class
Date
1.
What are the two most important factors in calculating your credit score?
a)
You might have to spend more money on gas and travel, depending on what you're doing
b)
Your mental health could suffer as a result of the stress of working more often
c)
Payment history and total debt
d)
Incorrect personal information
2.
Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT...
a)
Applying for another credit card to use in case she runs out of cash paying off her debt
b)
It is impossible to have a good credit score without credit history
c)
Credit reporting agencies (Equifax, Experian and TransUnion)
d)
Incorrect personal information
3.
All of the following would show up on a credit report EXCEPT...
a)
Use less than 30% of the credit limit and pay it off in full every month by the due date
b)
Loan or credit balances that are higher than she anticipates
c)
Salary of your current job
d)
AnnualCreditReport.com
4.
Which of the following methods of getting your credit score would involve paying a fee?
a)
Pros
b)
Getting a score from myFICO.com
c)
Make on-time payments
d)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
5.
Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?
a)
A longer, positive credit history will lower the interest rates on your loans
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
Since you don't have an extensive (or any) credit history, your bank can look back at how you've handled things like your checking and savings accounts to gauge whether or not you're a risky candidate for an introductory line of credit. The more the bank knows about you and your positive financial track record, the more likely they will be to extend to you a line of credit.
d)
Make on-time payments
6.
Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?
a)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
b)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
c)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
d)
It is impossible to have a good credit score without credit history
7.
Which of the following individuals or groups would be the LEAST likely to look at your credit score?
a)
Your mental health could suffer as a result of the stress of working more often
b)
High rate method
c)
Incorrect personal information
d)
A bank representative who is helping you open a savings account
8.
You have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the GREATEST positive impact?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
Pros
d)
Use less than 30% of the credit limit and pay it off in full every month by the due date
9.
What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?
a)
Outstanding or missing payments
b)
High rate method
c)
Pros
d)
Wages or tax refunds can be garnished
10.
Who tracks all of your credit information?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
c)
Getting a score from myFICO.com
d)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
11.
What is the general timeline to establish your first credit score?
a)
Applying for multiple credit cards
b)
Payment history and total debt
c)
Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."
d)
Six months after you first actively use your credit
12.
You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
c)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
d)
Contact the credit card company to have them fix it
13.
Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?
a)
An explanation of the mistake and any evidence you have supporting your claim
b)
Pros
c)
Contact the credit card company to have them fix it
d)
A bank representative who is helping you open a savings account
14.
Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
a)
Make on-time payments
b)
Applying for multiple credit cards
c)
Getting a score from myFICO.com
d)
Applying for another credit card to use in case she runs out of cash paying off her debt
15.
Which best describes the Debt Snowball method for paying off debt?
a)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
b)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
c)
You get to do something different from your main job
d)
Use less than 30% of the credit limit and pay it off in full every month by the due date
16.
Which of these represents a potential consequence of neglecting to pay your federal student loans?
a)
AnnualCreditReport.com
b)
Wages or tax refunds can be garnished
c)
Cons
d)
It is impossible to have a good credit score without credit history
17.
What benefits do you receive by taking out a loan with a cosigner?
a)
Cons
b)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
c)
Make on-time payments
d)
You could have additional money leftover after making larger payments on your debt
18.
You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score?
a)
Your mental health could suffer as a result of the stress of working more often
b)
Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."
c)
A bank representative who is helping you open a savings account
d)
Outstanding or missing payments
19.
Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?
a)
Since you don't have an extensive (or any) credit history, your bank can look back at how you've handled things like your checking and savings accounts to gauge whether or not you're a risky candidate for an introductory line of credit. The more the bank knows about you and your positive financial track record, the more likely they will be to extend to you a line of credit.
b)
Pros
c)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
d)
You get to do something different from your main job
20.
The amount you can charge to a secured credit card is limited by...
a)
Applying for another credit card to use in case she runs out of cash paying off her debt
b)
The amount of money you deposit into an account as collateral
c)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
d)
Incorrect personal information
21.
Which free credit report service is authorized by federal law but only accessible once per year?
a)
You might have to spend more money on gas and travel, depending on what you're doing
b)
AnnualCreditReport.com
c)
Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."
d)
You will qualify for more loans with better terms with a good credit history
22.
How can your credit score impact your financial well-being?
a)
Incorrect personal information
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
d)
The amount of money you deposit into an account as collateral
23.
Provide three reasons why it is important to start establishing credit history as early as possible.
a)
Pros
b)
AnnualCreditReport.com
c)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
d)
It is impossible to have a good credit score without credit history
24.
A longer, positive credit history will lower the interest rates on your loans
a)
A longer, positive credit history will lower the interest rates on your loans
b)
Getting a score from myFICO.com
c)
High rate method
d)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
25.
You will qualify for more loans with better terms with a good credit history
a)
Getting a score from myFICO.com
b)
You will qualify for more loans with better terms with a good credit history
c)
Outstanding or missing payments
d)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
26.
You may need a credit history to rent an apartment or set up your utilities
a)
You may need a credit history to rent an apartment or set up your utilities
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
More of your free time will be spend on your new side hustle or job
d)
Pros
27.
Patricia knows she can request a free copy of her credit report each year, but now that she has it, she's not sure where to start. What would you say are the two most important things that Patricia should look for in her credit report?
a)
A bank representative who is helping you open a savings account
b)
Outstanding or missing payments
c)
The amount of money you deposit into an account as collateral
d)
Six months after you first actively use your credit
28.
Accounts that she doesn't recognize at all
a)
Wages or tax refunds can be garnished
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
Applying for another credit card to use in case she runs out of cash paying off her debt
d)
Accounts that she doesn't recognize at all
29.
Incorrect personal information
a)
Incorrect personal information
b)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
c)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
d)
The amount of money you deposit into an account as collateral
30.
Loan or credit balances that are higher than she anticipates
a)
Loan or credit balances that are higher than she anticipates
b)
Credit reporting agencies (Equifax, Experian and TransUnion)
c)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
d)
AnnualCreditReport.com
31.
Even though it doesn't directly affect your credit score, opening accounts and having a positive relationship with your bank can improve your chances of gaining access to credit. Explain why that is.
a)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
b)
Contact the credit card company to have them fix it
c)
Since you don't have an extensive (or any) credit history, your bank can look back at how you've handled things like your checking and savings accounts to gauge whether or not you're a risky candidate for an introductory line of credit. The more the bank knows about you and your positive financial track record, the more likely they will be to extend to you a line of credit.
d)
Getting a score from myFICO.com
32.
Explain the relationship between your credit report and your credit score.
a)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
b)
Payment history and total debt
c)
You get to do something different from your main job
d)
The amount of money you deposit into an account as collateral
33.
Describe the pros and cons of looking for additional work or getting a second job to help pay down debts faster.
a)
You might have to spend more money on gas and travel, depending on what you're doing
b)
More of your free time will be spend on your new side hustle or job
c)
Pros
d)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
34.
You get to do something different from your main job
a)
Outstanding or missing payments
b)
You get to do something different from your main job
c)
A longer, positive credit history will lower the interest rates on your loans
d)
Your credit report shows your credit history - your relationship with credit in the past - such as loan payments over time, late payments, and bankruptcies. Using the data in this report, your credit score is determined to gauge how likely you are to pay back a future loan.
35.
You could have additional money leftover after making larger payments on your debt
a)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
b)
You could have additional money leftover after making larger payments on your debt
c)
Outstanding or missing payments
d)
Cons
36.
Cons
a)
Cons
b)
Loan or credit balances that are higher than she anticipates
c)
Applying for multiple credit cards
d)
You may need a credit history to rent an apartment or set up your utilities
37.
More of your free time will be spend on your new side hustle or job
a)
You get to do something different from your main job
b)
More of your free time will be spend on your new side hustle or job
c)
Make on-time payments
d)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
38.
Your mental health could suffer as a result of the stress of working more often
a)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
b)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
c)
Your mental health could suffer as a result of the stress of working more often
d)
It is impossible to have a good credit score without credit history
39.
You might have to spend more money on gas and travel, depending on what you're doing
a)
An explanation of the mistake and any evidence you have supporting your claim
b)
High rate method
c)
You might have to spend more money on gas and travel, depending on what you're doing
d)
Six months after you first actively use your credit
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